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Your Money

Christine Romans breaks down the financial news of the week.

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CNN

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00:31:00

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San Francisco, CA, USA

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Comcast Cable

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Channel v759

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mpeg2video

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ac3

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1920

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1080

TOPIC FREQUENCY

Gm 7, U.s. 3, Donald Sterling 3, Obama 3, China 3, Carly 3, Us 2, America 2, Carly Fiorina 2, Realtime 2, Shirley Sterling 1, Yahoo 1, Shelly 1, Ma Lally 1, Lori Siegel 1, Thencer 1, Mr. Pickacity 1, Mohammed Alertian 1, Mohammed Rnlth 1, Christine Romans 1,
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  CNN    Your Money    Christine Romans breaks down  
   the financial news of the week.  

    May 3, 2014
    11:00 - 11:31am PDT  

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market. i'm christine romans. this is "your money." like the movie, the u.s. economy was frozen in the first quarter. the polar vortex shrinking growth. but let it go. ♪ let it go ♪ let it go ♪ >> there is a spring thaw and jobs are popping up like tulips. 288,000 jobs created in april. broad-based gains with strong growth in professional and business services, retail, food service, construction, broad based. for some americans, this economy is back. there are even talent wars in some fields. but many americans are still left out in the cold. the number of long-term unemployed remains too high. 3.5 million people. those jobs are added. a few report find 44% of the jobs created over the past four years, low wage jobs. in fact, low wage industries
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ploy nearly 2 million more workers than at the start of the recession. that's fueling even more income and equality. in 1981, america's top 1% earned 8% of all pre-tax income. 30 years later, 20%. it's one america with two economies. which one do you live in? the chief economic adviser to the german alliance, carly fiorina, today she chairs the organization good 360. she advised mitt romney during his run. has the jobs market turned yet? >> it is turning. it is a strong earnings report, it created loss of jobs and highs sit-coming down. teenage unemployment is coming down. true exceptions, one is wages are stagnant and secondly, the station weight is down at levels we haven't seen since fine 78.
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so on the whole arc strong report. but there is still some more progress that needs to be made. >> yeah, that labor force participation has been a real problem because you feed more people involved in the recovery to really make it broad-based. carly, 288 thousand jobs created last month. >> that is a good number on its face achlts new abc washington post poll shows president obama's approval rating sits there, a new low, again, that number, that poll is before this jobs report. but it doesn't seem like the president is getting any credit for jobs coming back. does he deserve more credit? >> well, i think the truth is all of us hold our breasts every month to see what the jobs report is. then we heave a sigh of relief when the jobs report is good as it was this morning. and i think the reason we're all holding our breath and president obama isn't getting much credit from the person people is because people don't feel as though this is a very robust recovery. and as you pointed out, the recovery is leaving a lot of
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people behind. so you have a middle class that continues to be hollowed out. have you more small businesses failing. fewer starting than in any time in 40 years. you have a labor participation rate we haven't sooens seen since 1988. in other words, there are still real problems in this economy, despite a good report this month. >> and the white house has also made this year the year of talking about income inequality. mohammed rnlth that is the story right now. income equality. if this book almost 700 page, they can't keep it if store, amazon, it's a french economist, he argues capitalism mohammed is fueling a growing gap between top earners and everyone else. he says the answer is a wealth tax. >> in a country where the pretence of wealth is compared to income is going to increase. it's a revolution.
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>> so tax the rich, moment, that thencer? . >> first, it's amazing to see a book like that selling out. it tells me inequality is on the minds of lots of people. second, it's good to see a book leak that. because it is data driven. it is put into a global context, a global context, what is happening to inequality. there is two things i think people cannot disagree on. there is one big thing. people cannot agree that inequality is going up in this country. two, people cannot believe above a certain level, it's not a drive but becomes bad for a society as a whole including the rich. what we disagree on is what is that level? no one knows for sure. in terms of what mr. pickacity said, the wealth tracks, as attractive as it may sound is a non-starter. it's just not going to happen. >> he says it's a good thing. it's what he says you would like to see, you would never get a consensus on that.
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carly, speaking consensus, this week, senate republicans blocked raising the minimum wage. president obama says this is a very simple issue. listen. >> either are you in favor of raising wages for hard working americans or you are not. either you want to grow the economy from the middle out and the bottom up so that pros period of time is broad based or you think that top down economics is the way to go. >> carly, what about the minimum wage? raise the minimum wage, why not? >> here's the truth about the minimum wage. it will help some people who already have a job. it will hurt people who do not have jobs. so the issue is, do we not need to lift more people out of poverty and create more jobs? and do we not also need to drive ahead on industries that will create way above minimum wage jobs like energy, like approving the keystone pipeline? >> mohammed, raise minimum wage? >> yes. first of all, it's very hard to
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find conclusive studies that suggest that a higher minimum wage creates more unemployment. sec, this economy needs demand. needs aggregate demand. businesses are looking for demand and these people, does this segment of the population have the highest propensity to consume? thirdly, yes, we should raise it. >> two different views. the ceo. the economists, we'll leave it there. carly fiorina. mohammed alertian, thank you for your the hostful comments. daughters now earn nearly three tiles than their mothers did in the early '70s according to pugh. daughters still earn less than their dad did and their brothers. for more, give me 60 seconds on the clock. it's "money time.". >> when it comes to underpaying workers, subway is fast food's biggest offender. since 2000, franchises have racked up 17,000 fair labor act violations.
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they paid workers $3.8 million in reimburse:. so much for homeownership, not since 1995 when "braveheart" was in theaters was the homeownership rate so low. only 64.8% of americans own their home. target aiming to be hack proof. it's spending 100 million to switch to the more secure chip and pin based credit card. last year hackers stole credit card information from nearly 40 million customers. this year, microsoft will start selling x-box one in china t. world's most populous country lifted a 14-year ban on gameing consols. china's government feared video games could lead to violence and moral decay. watch auto net flicks, yahoo, aol and x-box will debut original online program in the year. they have signed on james franco, katie holmes and james buschemi. coming up, donald sterling may
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go to court to fight for ownership of his nba team. but can the court of public opinion and his owners legally force him out? the business of behavior next. ♪ .
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no matter how reviemed donald sterling is, he is a wealthy man. he bought the team in 1981 for $12 million. it is now valued north of $575 million by some estimates for some expecting the team to sell more than that. wealthy celebrities are voicing their interest in buying the team, boxers, floyd mayweather, oscar de la hoya.
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when donal sterling bought the team. he signed on that this the constitution and bylaws of the national basketball association. this was kept secret, until this week when the leak released it. now, give the nba commissioner brought powers to protect the business interests of the fba. it complies owners to comply with the rules of the leak. does donald sterling have a legal case for forcing him to sell his business with the nba. legally, is donald stern bound by the pages of this constitution these bylaws? >> he certainly signed onto it. forward to be a franchise owner, you have to sign onto it. i certainly believe he has to abide by those rules. the bottom line is we all have a copy of that now, everyone who was private for such a long time. i'm sure you have as well, i don't know that they can force him to sell the team under those
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rules. i think it's a bit murky. it's never been done before for this reason, you know, for racist remarks. >> right. >> i also think that he is litigious by nature. he uses lawsuits by sport. >> he built his empire first by suing. >> absolutely. there is no way in my mind he is going to sue. he could have an anti-trust game. they are all getting together for him to set. i was an anti-trust lawyer with the department of justice sometime. certainly he has ma kind of claim. bottom line, this is held by a family trust. shirley sterling, i have been saying it all along, she is a real player here. he is not going down quietly. >> without a fight. >> some said if the nba owners tried to vote out current ownership, that would be that trust and include shelly, but his wife. but you knows how this would look. it could get ugly.
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there is this other wrinkle. was this recorded illegally? suddenly, are they trying to force him to sell. these bylaws, were they based on something illegally obtained? >> we don't foe if it was illegally obtained. >> california is a two part consentee, everyone on that conversation, both parties have to consent it. now she is saying he was his archivist. whatever that means, which means she said she had consent, his consent to archive their conversations. i don't know, i think people are mixing apples and oranges when they say it's a legal tape. that means you can't use it as a grounds for getting the team away from him. i don't think that's true. does he have perhaps a causetive action against v viviano or whatever her name is? >> absolutely. i'm sure this is the book against nba v sterling. coming up, two very different roads for two
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different auto makers. gm hoping it is shielded from liability for that ignition switch problem. at the same time the ceo of ford headed off into the sun set. a look at two very close auto makers. is the smell of perfectly level, fresh-cut grass.
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. two of the big three auto makers are in very different places right now. ford is rolling. ceo ma lally leaves after turning around that company. his number two mark fields will replace him. fields was put in charge of changing ford's corporate culture. mulally will leave with a $300 million nestegg for turning things around. gm was in court to ask a bankruptcy judge to stem off lawsuits, those stem from egg in addition switches that killed 13 people. gm is hoping it is protected from liability after filing for bankruptcy in 2009.
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a senior writer is the authority on the auto industry around here in the newsroom. i want to talk to our car guy about car guys. our richard quest sat down with mulally. he's the guy that said the most important decision ford ever made was not to take bailout money. >> we decided to actually testify on behalf of our competitors that were bankrupt and we did that, with i is strange in itself, we did that because of the importance of the industry to the u.s. economy, but also the u.s. economy and the world economy. we knew if they went into free fall, we could have taken the united states into a depression. >> general motors became government motors. this guy was the turn around guy. he came in and literally saved this country and didn't need a taxpayer to do it. the company, i should say.
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>> people realize what trouble we are in. yeah, he turned around his company with better pot just better financing he helped streamline the portfolio and shed luxury brands so he could focus on the blue oval, the ford brand, himself. >> he's a legend there. a turn around guy. you think about tim cook's unlikely rise at apple. those have been relatively smooth so far. look back when jack welch left general electric. it was a game of thrones. you look at mark fields. he has taken over with ford. is he benefiting from those legendary big shoes to fill? or is that going to make it harder for him? >> one challenge i see for him
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is that allen mulally put together a culture change. ford has been a company of sharp elbows, internal competition. allen mulally acted like oil on the waters to smooth everything out. everybody likes him a lot he has done a lot to change that culture. can mark fields come in, a long time ford guy come in and maintain that culture change and bring the company back even more? >> let's talk about gm. it's over the ignition switch problem. bottom line, 13 people died. the company has a new ceo who will have to guide through all of this. at the same, it has a legal department making sure it has protection from any kind of liability because of its bankruptcy. gm, how much trouble is theic in addition problem going to be? it will stay in the headlines, negative headlines for some time? >> actually, if you look at sales, people have not stopped
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buying general motors cars. people seem to be believing in the products more than the headlines right now. now, will that continue? i tend to think it probably will. gm is, you are right, in a tough spot. this is why lawyers make lousy pr people. on the one hand, we are taking smiblt for this we understand. on the other hand, lawyers have to go in and say, hey, that was the old gm that was beyond the bankruptcy you can't hold us responsible. >> she has been a levelheaded speaker about the company at this point. >> given the spot, she a brand-new ceo, hit almost over the head when she walks in the door. i think she has done a good job with that one. up next, you still don't though where flight 370 ended up. we could have. >> that simple safety measure a new report says should be on every flight.
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why won't it be on the next plane you fly? that's next. he was a matted mess in a small cage. .
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confusion, misleading information and unanswered questions. the missing malaysia jet, that's a mystery. lori, you have been looking into the tech following that could have answered many of these questions. what did you find? >> reporter: if you piece together what happened to flight 370. one piece of evidence says it can make flying tough. the one safety recommendation they are offering, realtime tracking of aircraft, that technology already exists. >> it's economical. the question now is how to get more widespread use? >> reporter: canadian company flight makes recorders that send in information in realtime. it's a part of a slight-based system that monitors engines an more. >> the system monitors every five to ten minutes on a normal
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flight. >> reporter: if something goes wrong, the system will stream live second by second data. >> it's not only life saving. it adds a tremendous measure of security for our country. >> several systems transmit data. the technology behind flight is more extensive, sharing information, so much information, critics say it could be difficult to monitor and analyze if widely adopted. right now, flights technologies only installed in 350 planes. each installation costs about $100 now. . norm oom transmission costs about $15 per flight hour and goes up for continuous stream income a rare emergency. >> they're very cost sensitive and will not add additional safety measures unless mandated by the federal government. >> reporter: as the mystery of flight 370 lingers, hayden says
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officials could have had the answers all along. >> we would know where the aircraft has gone, with it is and we would have information on what happened in the meantime. >> reporter: and, christine, it's worth noteing realtime tracking with the same recommendation made after the air france flight 447 disaster in 2009. but nothing has changed since. >> all right, lori siegel, thanks for that report. finally, comedienne luchlt ck known for his rifts on men, women, bodily pungss, getting fat. >> i don't stop eating when i'm number t. meal is not over when i'm number. the meal is over when i hate myself. that's when i stop. >> but this week, he rantd on education policy, something that's usually not very funny h. etook to twitter railing against new common core standards and the tests and the homework that goes with it. he says his kids used to love
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math. now it makes them cry. he tweeted pictures of his daughter's homework questions and mocked their confusing wording. as you know from watching this show week after week, she is hardly alone. 44 states have adopted common core standards in english and math. now, that irsupposed to raise expectations to better prepare students for a career. we need it, right? across the country, parents are freaking out. >> we feel like the pressure is too much. >> it puts too much pressure on the students. >> higher standards are sadly becoming a punch line. by one measure the world bank says china will overtake the u.s. economy as early as this year. how we implement these standards matters. how schools communicate to students and parents matters. taking time to get homework and testing right, all of that matters, we'll have an education system that's worse, not better. stay tuned.
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thanks for spending "saturday smart" with us, set your dvr to auto record "your money" right now. you will never miss the money news that means most to you. see you back here next week. >>. hello, everyone, we are following several big stories for you this hour the violence and rhetoric getting more intense in ukraine. one separatist leader is calling for the formation of a new army. and the hunt for flight 3 seven is the about to change. it could involve a whole new search area thousands of miles away from where the crews are now. breaking her silence the woman who recorded donald sterling's racist tirades speaks oumt. hear her theory